Warren Buffett is one of the most widely followed investment managers in the world. And there's good reason for that. His 60-year run at Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) has been nothing short of phenomenal. Investors who followed Buffett into the company have realized a compound average annual return of about 20% since Buffett took over the business in 1965. That's nearly twice the average annual return of the S&P 500.

But it appears that Buffett has struggled in recent quarters to find great ways to deploy Berkshire's growing cash reserves. His potential best opportunities are getting only a small amount of capital infusion, as it appears that he's determined that many of the best large-cap stocks are overvalued. As a result, Berkshire put only $3.2 billion of cash into equities in the first quarter, leaving about $347 billion in cash and Treasury bill investments.

Some of that $3.2 billion went into an undisclosed stock exempted from disclosure by the Securities and Exchange Commission. The rest, which appears to be about $1.8 billion, went into seven different stocks reported on Berkshire's quarterly 13F filing.

One of those stocks stands out as an incredible value for investors right now, and it could be worth adding to your portfolio.

Here are the seven stocks Buffett just bought

Buffett admits he would love to buy more stocks. "Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned," he wrote in his letter to shareholders in February. But for Buffett to buy shares in a company, they must be offered, and offered at good value.

Evidently he saw only a handful of stocks that looked like good values last quarter. Here are the seven Berkshire has disclosed so far:

1. Heico
2. Verisign
3. Sirius XM
4. Pool Corp.
5. Domino's Pizza
6. Constellation Brands (NYSE: STZ)
7. Occidental Petroleum

It's worth pointing out that all of these businesses are relatively small. Occidental Petroleum sports the largest market cap of the group at $42 billion. And Berkshire already owns nearly 27% of that company.

Buffett doesn't see a lot of opportunities for Berkshire to invest tens of billions in a great company trading at a fair value. With Buffett strategically selling off some holdings while Berkshire's subsidiaries generate considerable free cash flow, the cash is piling up.

Everyday investors can invest as much money as they want in any of the seven companies above. But some of them are arguably better values than others, especially considering price movements since Buffett's purchases, some of which date all the way back to early January. Of the seven, there's one that looks like a particularly good value right now.

Here's the best of the bunch

All seven companies are great businesses. Each has at least one source of competitive advantage, and they generally trade for good value relative to earnings. But if I had to choose one of Buffett's latest purchases to invest my own money in, it would be Constellation Brands.

Constellation Brands is the owner of top Mexican beer brands like Corona and Modelo. It absolutely dominates U.S. sales for Mexican lagers. It also owns several wine and spirits brands, although its portfolio got a little bit smaller when it divested its mainstream wine brands earlier this month. Constellation is refocusing its portfolio on high-end brands. The beer business is its most important, accounting for over 80% of sales and over 90% of operating income in fiscal 2025.

It has a stranglehold on the Mexican beer import category in the U.S. The company said it accounts for over 90% of spending in the segment. And it's seen strong growth in sales for both Modelo and its smaller Pacifico brands over the past year, despite secular headwinds against the overall beer category. Total alcohol consumption appears to be declining, especially among younger generations, and new entrants like hard seltzer and ready-to-drink cocktails continue to eat into beer's market share.

Those headwinds and a new tariff this year on Mexican imports into the United States have led many investors to sell the stock. A disappointing earnings report in January didn't help, either. The stock currently trades more than 20% below where it started the year.

But the outlook for the business is strong. Management expects sales growth in the low-single-digit range over the next three years as the wine and spirits business continues to drag down the beer business. Strategic divestments over time could refocus more of the business on higher-margin and growth opportunities. Overall, management also expects its operating margin to expand 1 to 2 percentage points from last year's levels by 2028.

The expected net result is $6 billion to $7 billion in free-cash-flow generation over the next three years, and management has earmarked about $4 billion of that for share repurchases. That would reduce its current share count by over 13% at its current price. Management forecasts it'll buy up about 9% of shares outstanding over the next three years, with expectations that the price of the stock will rise.

Given the resilience of Constellation's beer brands and management's focus on capital returns and high-margin opportunities, investors should see strong earnings growth after adjusting for divestments. Nonetheless, the stock trades for less than 14 times forward earnings estimates. That makes it worth considering as an addition to any value investor's portfolio right now.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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If you're looking for one of Warren Buffett's biggest gainers of this year, you may want to start with one of his worst performers in 2024. Sirius XM Holdings (NASDAQ: SIRI) was a painful stock to own last year. Shares of the satellite radio provider plummeted 58% in 2023.

Sirius XM is one of the roughly three dozen publicly traded companies owned by Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B). It accounts for a little less than 1% of the value of that widely followed portfolio, but Buffett seems to disagree with the yearlong sell-off. Berkshire Hathaway added to its position in October. It purchased nearly 5 million more shares last month.

Is it time to follow Buffett's lead, warming up to a media bellwether that began last year as a large cap but got marked down to a mid-cap? Let's take a closer look at what went wrong for Sirius XM, then check out the things that can go right for one of Berkshire Hathaway's latest cravings.

Turning down the volume

It's easy to see why speculators have moved on from the investment that was a meme stock before meme stocks were a thing. It was a popular penny stock with seismic growth potential ages ago. A reverse stock split in September -- which facilitated the transaction to absorb complicated tracking shares that Buffett also used to own -- fished the share price out of the single-digit betting pool.

Growth investors have also set up camp elsewhere. Sirius XM is now entering what should be its third consecutive year of declining revenue. The shares were running on fumes for a long time before this unfortunate streak. You have to go all the way back to 2014 to find the last year that Sirius XM came through with organic double-digit revenue growth.

At least some of the downticks of 2024 are justified. The number of premium subscribers to the flagship satellite radio service peaked in 2019. The platform was starting to stage a recovery coming out of the pandemic, but that bullish trend ran out of gas in 2023. A modest 0.6% decline in revenue two years ago should widen to a roughly 3% slide by the time 2024 numbers become official.

The stock took one final hit last month when it issued disappointing guidance for 2025. Sirius XM is now bracing investors for a 2% top-line decline for all of this year. This was after the radio broadcaster revised its 2024 outlook lower on Halloween. Can 2025 can turn last year's black cat into catalysts?

Playing a new tune

The exit of speculators and growth investors should open the door for value and income investors. This is a scalable model that is vulnerable to the impact of contracting revenue, but Sirius XM is still generating a lot of free cash flow and positive earnings even as it struggles.

Sirius XM still expects to deliver $1.15 billion in free cash flow in 2025, along with $2.6 billion in adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA). This is a slight step back from last year on both fronts, but Sirius XM shares are now trading for just 7.6 times forward earnings.

The platform, with 33.2 million subscribers, is doing some encouraging things with its excess cash. It's been buying back stock, reducing its once-massive outstanding share count by 42% over the past dozen years. It's also shelling out a substantial dividend that has become even more generous after eight years of hikes and the free-falling stock price. The stock is now yielding around 4.7%, more than the market's highest-yielding money market funds, which have retreated on their payouts in recent months.

Sirius XM's business hasn't faded as quickly as the stock over the past year. Berkshire Hathaway likely sees the value in today's lower price, but don't be surprised if Sirius XM is lacing its shoes to race again.

Satellite radio is consumed largely in vehicles, and there are strong catalysts for folks getting in their cars again. U.S. retail gas prices have fallen substantially since springtime of last year. Companies are calling employees back to in-office work. Lending rates haven't fallen as sharply as many had hoped, but when that does happen, it should trigger a surge in auto loan demand from folks looking to refresh their cars.

A cheap stock with a hefty quarterly dividend and bullish catalysts hiding in plain sight? Don't be surprised if one of Buffett's biggest losers in 2024 leads Berkshire Hathaway's stock portfolio higher in 2025.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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There's arguably not a money manager on Wall Street that has the ability to command the attention of professional and everyday investors quite like Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) CEO Warren Buffett. In his six decades as CEO of Berkshire, he's overseen a cumulative return in his company's Class A shares of more than 5,460,000%, as of the closing bell on January 2.

Mirroring the Oracle of Omaha's trading activity, which can be done using Berkshire Hathaway's quarterly filed Form 13Fs, has been a seemingly surefire investment strategy for decades.

Even though Buffett has been a net seller of stocks to the tune of $166 billion over an eight-quarter stretch (October 1, 2022 through to September 30, 2024), he's still been buying shares of a select group of time-tested businesses.

As we turn the page to 2025, Buffett is betting big on the following five stocks.

Sirius XM Holdings

One of the most interesting stocks that Berkshire's chief can't stop buying of late is satellite-radio operator Sirius XM Holdings (NASDAQ: SIRI).

Sirius XM completed a merger with Liberty Media's Sirius XM tracking stock following the close of trading on September 9, and also effected a 1-for-10 reverse stock split. Whereas most companies conducting reverse splits do so to avoid delisting from a major stock exchange, Sirius XM was in no danger of delisting. Rather, its split seems solely focused on getting its stock back on the radar of institutional investors who won't purchase stocks trading below $5 per share.

The beauty of Sirius XM's operating model is twofold. First, it's a legal monopoly. There are no other licensed satellite-radio operators, which, more often than not, affords the company strong subscription pricing power.

The other attractive aspect of Sirius XM's operating model is that its primarily subscription driven. Whereas terrestrial and online radio companies rely almost exclusively on advertising revenue to keep the proverbial hamster on its wheel, Sirius XM generated close to 77% of its net sales from subscriptions and roughly 20% from advertising through the first nine months of 2024. The advantage of Sirius XM's approach is that its cash flow remains steadier during periods of economic uncertainty.

Additionally, Sirius XM stock is historically cheap, which is something the value-oriented Oracle of Omaha can appreciate. Amid a historically pricey stock market, Sirius XM is valued at just over 7 times forward-year earnings and its dividend yield is approaching an all-time high of 5%.

Occidental Petroleum

When 2022 began, Berkshire Hathaway held $10 billion worth of Occidental Petroleum (NYSE: OXY) preferred stock (yielding 8% annually), but not a single common share of stock. Over the last three years, Buffett and his top advisors, Ted Weschler and Todd Combs, have acquired 264,178,414 common shares of Occidental stock.

Historically, energy stocks haven't accounted for a sizable percentage of the portfolio Buffett oversees at Berkshire. But that's changed, with over $30 billion, combined, currently invested in Chevron and Occidental. It's a pretty clear signal that Buffett and his crew expect the spot price for crude oil to remain elevated.

Perhaps the biggest catalyst for oil is that global energy companies were forced to slash their capital expenditures (capex) for three years during the COVID-19 pandemic. Even though capex has returned to normal, increasing crude supply isn't going to happen overnight. When the supply of a high-demand commodity is constrained, it usually provides a lift to its spot price.

A higher spot price for crude is particularly impactful for Occidental Petroleum, which generates the lion's share of its revenue from its drilling operations. If the price of crude oil rises, operating cash flow for Occidental will disproportionately benefit, relative to its peers. Just keep in mind that the reciprocal is also true, with Occidental's cash flow being hit harder than other drillers when the spot price of crude declines.

Domino's Pizza

A third phenomenal business that Warren Buffett is betting big on in the new year is one of consumers' most beloved brands, Domino's Pizza (NASDAQ: DPZ). Domino's was the biggest buy made by Buffett and his crew during the September-ended quarter.

One of the business characteristics Domino's possesses that the Oracle of Omaha has previously emphasised the importance of to investors is trust. Roughly 15 years ago, Domino's marketing campaign admitted that its pizza wasn't very good and that it had to do better. Over time, the company's transparent marketing approach, along with process and product innovation, has worked wonders.

Something else that's finding the mark is Domino's five-year "Hungry for MORE" initiative. Introduced by CEO Russell Weiner in December 2023, Hungry for MORE emphasises a reliance on technology to improve output and product consistency, as well as leans on the company's franchisees to enhance the value of its brand.

The international opportunity for Domino's Pizza shouldn't be overlooked, either. The company is on track for its 31st consecutive year of international same-store sales growth. This speaks to its brand value and reliance on product innovation to drive growth.

Chubb

Another stock the Oracle of Omaha very clearly wants to own in 2025 is property and casualty insurance company Chubb (NYSE: CB). Chubb was the stock given "confidential treatment" that Buffett and his team built a sizable position in between July 2023 and March 2024.

What makes insurance stocks so desirable for value investors like Warren Buffett is the stability of their operating model and premium pricing power. When loss events occur, insurers like Chubb have reason to raise premiums. But they can also increase premiums when claim losses are low with the justification that catastrophe events are inevitable.

Chubb also benefits from the niche focus of its homeowner insurance segment. The company predominantly insures higher-value homes, which leads to more lucrative premiums. High earners are less likely than average-earning workers to adjust their spending habits or fail to pay their bills when economic disruptions occur.

Lastly, insurers like Chubb are reaping the rewards of the Federal Reserve undertaking its most aggressive rate-hiking cycle in four decades (from March 2022 through July 2023). Insurers invest their float — the premium collected that hasn't been paid out in claims — in safe, short-term Treasury bills. The higher the yield, the more interest income the company can generate.

Berkshire Hathaway

The fifth magnificent stock Warren Buffett is betting big on for 2025 is none other than shares of his own company, Berkshire Hathaway. Though the September-ended quarter marked the first quarter out of the last 25 that Buffett didn't repurchase Berkshire's shares, he's collectively bought back around $78 billion worth of his company's stock since mid-July 2018.

Since Berkshire Hathaway doesn't pay a dividend, buybacks serve a number of key purposes. For starters, they reward patient investors. A steadily declining share count gradually increases the ownership stake of existing shareholders. In short, it reinforces the long-term investing ethos that Buffett and the late Charlie Munger preached for decades.

Secondly, share repurchases can increase earnings per share (EPS) for companies like Berkshire Hathaway that have steady or growing net income. A 12.6% aggregate decline in Berkshire's outstanding share count since mid-2018 has increased the company's EPS and made it more attractive to fundamentally focused investors.

It could also be argued that ongoing share buybacks reinforce Buffett's belief in the company he's helped build over six decades. What better way to demonstrate to investors a belief that Berkshire is still undervalued than to purchase around $78 billion worth of stock in a little over six years.

Finally, with a record $325.2 billion in cash, cash equivalents, and U.S. Treasuries on Berkshire's balance sheet, the Oracle of Omaha has quite the buffer to repurchase his company's stock.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The 10F filing from Warren Buffett's Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B) is probably one of, if not the, most anticipated on the entire American stock market.

The last time Berkshire Hathaway filed a 10F report, we covered some of Buffett's significant stock sales, as well as the far fewer buys.

So what does the latest report tell us?

What has Berkshire Hathaway been buying (and selling)?

Compared to the November 10F, this February's report was far tamer. However, Buffett was still a net seller of stocks over the three months to 31 December.

Here are some of Berkshire's major sales, according to WhaleWisdom:

• HP Inc (NYSE: HPQ), with Berkshire selling US$2.4 billion worth of stock
• Apple Inc (NASDAQ: AAPL), US$1.93 billion sold
• D.R. Horton Inc (NYSE: DHI), with US$710 million sold
• Paramount Global Inc (NASDAQ: PARA) with US$450 million sold
• Markel Group Inc (NYSE: MKL) with US$259 million sold

In contrast, Buffett's buys were a lot less enthusiastic:

• Chevron Corp (NYSE: CVX), with Berkshire buying US$2.36 billion worth of stock
• Occidental Petroleum Corp (NYSE: OXY), US$1.17 billion purchase
• Sirius XM Holdings Inc (NASDAQ: SIRI), US$167 million purchase

Buffett doubles down on big oil

This is an interesting report to go through. Buffett is famous for his buy-and-hold investing, once commenting that his favourite holding time for an investment is "forever". So it's interesting to see Berkshire trim its largest position (accounting for more than 50% of Berkshire's portfolio) in Apple. Of Course, US$1.9 billion is something of a drop in the bucket – Berkshire still owns almost US$166.5 billion worth of Apple stock.

But the sale is still significant, given what Buffett has previously said.

Also significant is Buffett's buyup of oil giant Chevron, as well as Occidental. Last quarter's 10F filing revealed that Berkshire had offloaded shares in Chevron. As such, it's notable to see Buffett buying them back up, as well as shares in fellow oil stock Occidental. The recent volatility in oil prices (and thus the share prices of oil stocks) could have something to do with this.

Buffett's other major sale was in tech company HP. HP shares haven't gone anywhere for a while but did rally around 20% between October and December last year. So perhaps this gave Buffett an excuse to sell a big chunk of shares.

Foolish takeaway

Buffett's portfolio moves often seem to contradict the advice that he so generously showers on ordinary investors. Because we rarely get explanations or insights into Buffett's thinking (and if so, they usually come months later), I tend to think it's best to take what Buffett says as gospel advice, rather than what he does.

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